The Department for Work and Pensions (DWP) is facing mounting criticism for its 'one-size-fits-all' approach to the state pension, which experts warn is profoundly unfair to retirees in areas with lower life expectancy.
The Great British Pension Divide
Under the current system, the state pension is paid out from age 66 to everyone across the UK. However, this uniform policy creates stark inequalities. Official data reveals a dramatic life expectancy gap across the country.
Women in the affluent London borough of Kensington and Chelsea have the highest life expectancy at over 86 years. In stark contrast, men in Blackpool have the shortest, at just over 73 years.
With the full new state pension set to increase to £241.30 per week from next April, this 13-year difference in life expectancy translates into a staggering payment gap of approximately £165,000 between these two demographic groups over their retirement.
Calls for a Fairer System
Rebecca Lamb, External Relations Manager at Money Wellness, stated that this data clearly shows 'the state pension doesn’t benefit everyone equally'.
She emphasised the urgency for the upcoming state pension age review to address these deep-seated inequalities. 'A one-size-fits-all approach can feel unfair when people’s health, job types and life chances vary so much depending on where they live,' she explained.
Lamb suggested that a fairer system could theoretically involve:
- Earlier access for people in certain physically demanding jobs or with poorer health.
- More flexible pension options based on regional life expectancy data.
However, she acknowledged the practical challenges, noting that such a system 'would be complicated to get right and could make the system harder to manage and expensive to administer.'
Alternative Solutions for Pension Equity
Instead of implementing different pension ages across various regions, which could be administratively burdensome, Lamb proposed a more holistic solution.
'Rather than different pension ages across regions, a fairer solution might be to better support people in areas with the lowest life expectancy,' she said.
This support could take several forms:
- Extra financial assistance or specific national insurance credits for eligible individuals.
- Targeted investments in local health services and job opportunities to improve overall life outcomes.
Ultimately, addressing the root causes of the health and wealth divide is presented as a more sustainable path to pension fairness.
It is crucial for individuals to understand that their state pension entitlement is based on their National Insurance (NI) record. You typically need 35 qualifying years of NI contributions to receive the full new State Pension, with a minimum of 10 years required to receive any payment at all. Those with gaps in their record can explore making voluntary contributions to boost their eventual pension income.
